Fate of Bush-era Tax Cuts Derails Super Committee
Congress' Joint Select Committee on Deficit Reduction (the so-called "super committee") failed to reach an agreement by its November 23 deadline after weeks of sparring over the Bush-era tax cuts. The Budget Control Act of 2011 created the bipartisan super committee in August and instructed it to develop proposals to reduce the federal budget deficit by November 23...

New Law Repeals 3% Government Withholding, Provides Hiring Credits
On November 21, President Obama signed into law the 3% Withholding Repeal and Job Creation Act. The new law does much more than merely repeals withholding on government contractors. The new law enhances the Work Opportunity Tax Credit (WOTC) for veterans of the U.S. Armed Forces, expands the IRS' continuous levy authority, and more...

Year-end Investment Strategies for 2011 Worth a Look
As 2011 winds down, investors should consider several last-minute strategies to improve their bottom line tax liability. Many of these strategies follow traditional advice applicable to any year-end. Others, however, are unique to 2011, not only because of the continuing impact of the economy but also because of major tax changes that are threatening for 2013...

FAQ - Does Sick Pay Get Any Special Tax Treatment?
The term "sick pay" can refer to a variety of payments. Some of these payments are nontaxable, while others are treated as taxable income. Some of the taxable payments are treated as compensation, subject to income tax withholding and employment taxes; others are exempt from some employment taxes...

How do I - Place Assets “In Service” for Depreciation Purposes?
Depreciation is a reasonable allowance for wear and tear on property used in a trade or business or for the production of income. Property is depreciable if it has a useful life greater than one year and depreciates in value. Property that appreciates in value may also  depreciate if subject to wear and tear. Depreciation ends in the tax year that the asset is retired from service...

December 2011 Tax Compliance Calendar
As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important tax reporting and filing data for individuals, businesses and other taxpayers for the month of December 2011...

IRS Delays Backup Withholding for Payment Card Transactions
The IRS has heard the outcry from retail merchants and other businesses and has delayed for one year the effective date for potential backup withholding obligations on payments made in settlement of payment card transactions and third party network transactions. The backup withholding requirements on these so-called Code Sec. 6050W payments will not apply until after December 31, 2012...

IRS Allows Taxpayer-friendly Treatment for Deduction of Employee Bonuses
Just in time for year-end compensation planning, the IRS recently issued guidance that clarifies an accounting question for business taxpayers seeking the proper taxable year in which to take employee bonus deductions. According to the IRS, an employer using the accrual method of accounting can take the deduction for employee bonuses in the same year that the bonus recipient pool...

IRS Statistics of Income (SOI) Bulletin Shows Impact of Economic Downturn
Starting in 1916, the Statistics of Income (SOI) Division and its predecessor, the Statistics Division, have compiled statistics on federal taxation. In recent years the SOI bulletins have contained statistics evidencing the effect of the recession and slow economy on individual, partnership, and tax-exempt organization items of income...

Tax Court Includes FLP Property in Gross Estate
The Tax Court recently held that a decedent's transfer of real estate to a family limited partnership (FLP) was not a bona fide sale. As a result, the value of the property transferred to the FLP was included in the decedent's estate. The decision reflects a commonly occurring dispute between the IRS and taxpayers that have tried to use the FLP to transfer assets to surviving family members...

Projected 2012 Auto/Truck Fringe Benefit Maximum Values Available
CCH tax publishers just released its projected estimated maximum fair market values (FMVs) for business automobiles, trucks and vans in 2012. The dollar amounts are all going up, quite significantly in some cases. The IRS will soon release the official figures for 2012, which may be used to determine the fringe benefit value of the personal use of employer-provided vehicles...

PA - DOR Updates Bulletin on Restricted Credits
The Pennsylvania Department of Revenue (DOR) has issued a corporate income tax bulletin addressing the application of restricted credits and requirements for selling tax credits. Specifically, the bulletin applies to the following credits...

Tax Alerts - November 2011

To ensure compliance with requirements imposed by the IRS, please note, any advice contained in this publication was not intended, or written, to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. This publication is distributed with the understanding that the publisher and distributor are not providing legal, accounting or other professional advice and assume no liability whatsoever in conjunction with the information contained within this publication.